Zacks
0
All posts from Zacks
Zacks in Our Research. Your Success.,

Can Outfront's Asset Buyouts Mitigate Soft Market Concerns?

Outfront Media Inc. OUT is enhancing its portfolio with strategic buyouts and asset swaps. In fact, recently, the company announced an asset swap with Independent Outdoor Network. This helped the company acquire digital billboards in the Boston designated market area (DMA) and shed its static display assets in non-metro areas of Wisconsin, Missouri, Illinois, Tennessee and South Carolina.

Earlier, Outfront had announced the acquisition of equity interests of specific Canadian subsidiaries of All Vision LLC. This helped Outfront boost its property base, with a portfolio of digital billboards in Toronto, Montreal, Calgary, Edmonton and Vancouver. The company shelled out around $50.0 million in cash and $44.4 million in Class A equity interests.

Outfront already enjoys a geographically diversified asset base, with its advertising sites being present in 36 states, as well as in Washington D.C. and Canada. This diversification helps the company draw a wide range of audience. Moreover, its tenants come from a broad range of industries, including healthcare/pharmaceuticals, retail and television. This diversity, both geographically and industry wise, makes the company’s revenues less volatile in nature and stokes its long-term growth.

However, the company’s first-quarter 2017 results mirrored a softness in the national advertising market, specifically in the automotive category. This weakness is expected to stretch in the second quarter as well. Further, competition from other outdoor advertisers for customers, seasonality of business, dependence on the prospects of advertisers and national economy, and any rise in interest rates pose challenges for the company.

Also, shares of Outfront underperformed the Zacks categorized REIT – Equity Trust – Other industry over the past three months. During this time frame, shares of the company declined 13.1%, whereas the industry descended 2.1%.



The Zacks Consensus Estimate for Outfront’s funds from operations (“FFO”) per share for second-quarter and full-year 2017 remained unchanged at 54 cents and $2.04, respectively, over the last 30 days. The stock currently carries a Zacks Rank #3 (Hold).  

Stocks to Consider

A few better-ranked stocks in the REIT space include Liberty Property Trust LPT, PS Business Parks, Inc. PSB and Whitestone REIT WSR. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Liberty Property Trust and PS Business Parks have long-term growth rates of 6% and 5%, respectively.

Whitestone REIT’s FFO per share estimates for 2017 moved up 3.96% to $1.05, over the past 60 days.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

More Stock News: 8 Companies Verge on Apple-Like Run                                       

 Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.

A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
PS Business Parks, Inc. (PSB): Free Stock Analysis Report
 
Whitestone REIT (WSR): Free Stock Analysis Report
 
OUTFRONT Media Inc. (OUT): Free Stock Analysis Report
 
Liberty Property Trust (LPT): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research